The HOT to HoloFuel migration is coming.

FAQ

HOT was always intended to become HoloFuel. That migration is being made ready. Here is what it is, and how it works.

The basics

What is happening, exactly?

HOT was issued as a temporary token, designed to be redeemable for HoloFuel once the software to do so was ready. That software is now being made available. Each unit of HOT is equal to one unit of HoloFuel — a one-to-one migration.

What is HoloFuel?

HoloFuel is a utility currency built on Holochain. It is a mutual-credit accounting currency — something designed to be used, not held as a bet on price. It is not a share, not a security, and not a claim on any company. This page describes a migration of one token into another; it is not an offer, and it says nothing about value.

How will the migration work?

The migration happens through software, and it is non-custodial from beginning to end. No company holds your HOT or your HoloFuel, and there is no counterparty on the other side. HOT is locked on the Ethereum blockchain by an automated process that no person or company can override, and a wrapped equivalent becomes available; that wrapped HOT is then convertible to HoloFuel, under the holder's own keys throughout.

Non-custodial means: your assets are never in anyone else's hands. No single party — including the party that maintains the software — can move locked HOT or take custody of it. The software performs the migration; no one holds your funds.

When will it open, and for how long?

The migration opens by the date indicated on the countdown timer. How long it stays open, and the conditions that apply, will be set out in the terms that govern it, which are published before it opens.

What rules govern it?

This page is a plain-language summary. The migration is governed by a separate set of terms — the Platform Terms — that are published before the migration opens and that set out, in full, how it operates, who operates it, and the conditions that apply. Where this summary and those terms differ, the Platform Terms govern.

What this is not

• It is not an investment, and it carries no promise or expectation of profit.
• It is not a sale — you are converting a token you already hold into another.
• It is not custodial — no one takes hold of your assets at any point.
• It makes no representation about the value of HOT or HoloFuel, now or in the future.

The mechanism

What actually happens when I migrate?

Two separate operations. They are distinct decisions, they happen at different times, and only the second one is the migration in the sense people mean.

Step one — bridging. On Ethereum, you send your Unyt address info and some HOT to a smart contract where it gets locked. On Holo’s Unyt instance, the HOT bridge agent recognizes your action, then issues an equivalent amount of mirrored HOT by sending it to the Unyt address that you provided.

What you hold after this step is still HOT. It represents the same pre-sale claim. No HOT has yet been migrated to HoloFuel. No obligations have been discharged. You still hold your HOT under your control — just on Unyt as an L2 network rather than on Ethereum where the original HOT ERC20 contract is. This activity does not alter the supply of HOT, because the same amount of HOT is in circulation.

Step two — migrating. You exchange your mirrored HOT for HoloFuel. HoloFuel is a different unit of currency. The reserve agent is automated to accept mirrored HOT and issue HoloFuel at one to one.

This is the step that changes what unit you hold. It is where the pre-sale token becomes functional hosting credits. It is the point at which the original claim is delivered.

I've bridged but not migrated. Can I change my mind?

Yes. Bridging runs in both directions. Any holder of HOT on Unyt can bridge back out to Ethereum by returning the units to the bridge agreement, collecting the required verification signatures, and passing that data to the unlock function on the smart contract.

Migrating is the step that changes what you hold. Bridging is not.

Is my HOT destroyed?

No. It is locked, not burned — but the specific tokens are no longer individually yours. They join a pool of locked HOT held against the mirrored units in circulation on Unyt. What you hold is the mirrored unit.

Locked HOT can only be released by the smart contract, and only on multi-signature proof that a holder of mirrored HOT has transferred those units to the bridge agent on the Unyt side.

Transferring it to the bridge agent effectively “burns” the mirrored HOT by extinguishing that amount of the negative balance incurred when those mirrored units were issued.

The 2017 Green Paper said tokens would be destroyed on exchange. Why the change?

Because HOT's liquidity cannot be easily recreated. HOT has established trading pairs across many exchanges, built up over years. Reproducing that for a new unit would cost millions of dollars and take years. Keeping HOT as the liquidity path is better for holders than destroying it, and that requires locking rather than burning.

Does migrating give me a credit limit?

No. You receive a HoloFuel balance. Credit limits are a separate mechanism and host credit limits are not being activated in the near term.

What are the Reserves?

The mirrored HOT that the reserve agent accumulates as people migrate into HoloFuel. That pool of reserves is what is available for migrating HoloFuel back to HOT for service providers.

Does holding HoloFuel give me a claim on the Reserves?

No. Access to Reserves comes from providing commercial services into the network, not from holding a balance. It has never been offered to holders on any other basis.

A useful comparison is frequent flyer miles. A hotel or car rental company with a contract can collect cash from the airline for redeeming your miles, but holding a balance of miles doesn't entitle you to the same thing. Reserves work similarly: they exist so that the people providing hosting have a reason to provide it.

The decision

Should I migrate?

That depends on what you want to do with it. HoloFuel is what you use to pay for hosting and services. HOT is not going away and remains the primary path to liquidity, so people holding for liquidity rather than use are likely to keep holding HOT.

We are not going to tell you which to hold. What we will do is make sure you are deciding against an accurate description of both.

Is migration compulsory?

No. Migration is voluntary.

Will unmigrated HOT be burned?

No. All HOT continues to exist, whether locked in the Ethereum smart contract or held in a wallet.

What is the conversion rate?

The reserve agent is automated to accept mirrored HOT and issue HoloFuel at one to one.

An inbound rate does not establish an outbound rate. Exchanging HOT for HoloFuel does not create an entitlement to exchange it back at the same rate, or at all.

The economics

Will Holo Ventures' revenue be used to buy HoloFuel?

No. Holo Ventures is a venture studio. It builds commercial products and services and spins out companies it retains a stake in. That revenue funds the company and the Holochain Foundation. But we do expect many or most of those ventures to accept HoloFuel for the products they offer — adding to the overall utility of HoloFuel.

Does commercial success benefit HoloFuel holders?

Indirectly, through utility. The purpose of that revenue is to fund ventures that give HoloFuel more to do — more places to earn it, more places to spend it.

Does HoloFuel appreciate as the ecosystem grows?

Not through the credit mechanism. HoloFuel is mutual credit — positive balances equal negative balances, always.

When demand rises, credit limits expand and supply meets it. Growth in usage is absorbed by supply expanding rather than by units becoming scarcer. That is deliberate: the design targets stable, usable value, because economic planning requires knowing what a unit will be worth next quarter.

This describes how the currency itself works. It is not a claim that no rate will ever exist between HoloFuel and anything else — HoloFuel is self-custodial, and what people agree between themselves is up to them.

Will HoloFuel be listed on exchanges?

There are no short-term plans to list HoloFuel. The obstacle is cost and time in what has largely become a “pay to play” market.

These FAQs will be updated regularly prior to the migration.